German election on Sunday is also in focus
European stocks edged lower on Friday, with traders spooked by the latest aggression from North Korea, which threatened to test a nuclear bomb in the Pacific Ocean.
Losses, however, were tempered by a round of upbeat PMI data for the eurozone, confirming the region's economic recovery is on track.
The Stoxx Europe 600 index fell 0.2% to 382.17, trimming its potential weekly gain to 0.4%. The pan-European index on Thursday settled higher, boosted by bank stocks after hints from the U.S. Federal Reserve that more rate hikes are coming this year and next.
On Friday, tensions between the U.S. and Pyongyang returned to focus after North Korea's foreign minister Ri Yong Ho said the isolated regime might conduct a hydrogen bomb test of "unprecedented scale" in the Pacific Ocean.
Ri's comments at a United Nations meeting in New York came shortly after Kim Jong Un released a statement threatening to make U.S. President Donald Trump "pay dearly" for his fiery speech to the U.N. on Tuesday. In that speech, Trump threatened to "totally destroy" North Korea.
Read: Kim Jong Un calls Trump 'mentally deranged U.S. dotard,' setting off scramble for dictionaries (http://www.marketwatch.com/story/kim-jong-un-calls-trump-mentally-deranged-us-dotard-setting-off-scramble-for-dictionaries-2017-09-21)
(http://www.marketwatch.com/story/kim-jong-un-calls-trump-mentally-deranged-us-dotard-setting-off-scramble-for-dictionaries-2017-09-21)"It did not take long for North Korea to react to President Trump's recent address to the United Nations General Assembly," analysts at FxPro said in a note.
"Needless to say, these comments have caused a degree of risk off in the markets with safe-havens benefiting," they added.
Gold prices were up 0.4%, while the yen rallied against the dollar . The greenback bought Yen112.01, down from Yen112.48 late Thursday in New York.
(http://www.marketwatch.com/story/kim-jong-un-calls-trump-mentally-deranged-us-dotard-setting-off-scramble-for-dictionaries-2017-09-21)Economic news: Business activity data from the eurozone were overall upbeat, largely beating analyst forecasts. The composite purchasing managers index for the currency bloc rose to 56.7 in September, marking a four-month high.
France's composite PMI jumped to a 76-month high, while Germany's PMI rose to a 77-month high.
The euro climbed to an intraday high of $1.2000 after the PMI releases, up from $1.1941 on Thursday.
Indexes: Germany's DAX 30 index slipped 0.1% to 12,594.24, ahead of the country's general election on Sunday.
Sitting Chancellor Angela Merkel is widely expected to secure a fourth term in power, but the big question is who she teams up with for a coalition.
Read:5 things you need to know about the German election (http://www.marketwatch.com/story/5-things-you-need-to-know-about-the-german-election-2017-09-21)
(http://www.marketwatch.com/story/5-things-you-need-to-know-about-the-german-election-2017-09-21)Also read:Don't call the German election boring -- it could be a huge shift for the eurozone (http://www.marketwatch.com/story/dont-call-the-german-election-boring-it-could-mean-a-huge-shift-for-the-eurozone-2017-09-18)
The U.K.'s FTSE 100 index gave up 0.1% to 7,254.46, while France's CAC 40 index was up 0.2% at 5,277.47, lifted by L'Oreal and Carrefour.
Stock movers: Shares of L'Oreal SA (OR.FR) leapt 3.6% for the biggest gain in the Stoxx 600 after the death of L'Oreal heiress Liliane Bettencourt (http://www.marketwatch.com/story/loreal-heiress-liliane-bettencourt-dies-aged-94-2017-09-21) sparked takeover speculation.
Staying in France, shares of Carrefour SA (CA.FR) rose 1% after the supermarkets chain said it has formed a new group executive committee aimed at improving management and coordination between departments.
On a downbeat note, shares of Smiths Group PLC (SMIN.LN) fell 4% after reporting earnings (http://www.marketwatch.com/story/smiths-group-pretax-profit-soars-on-wider-margins-2017-09-22).
(END) Dow Jones Newswires
September 22, 2017 04:17 ET (08:17 GMT)